Is there another way?

GAILEY

Actually looking through my insurance policies last night - thinking of downgrading them but actually realsied they aren't bad policies ....think I need to be dead, dying or at least singing a swansong to get anything under the main one I pay with Scottish Amicable - but I have one with Paysafe too, which seems good - as it pays after 3 months of unemployment and you can switch to the sickness bit of cover without waiting another 3 months...which will be handy as my OH got a date for an operation which will incapacitate him for a while....think that one at least will have been worth the money:o

dimbo61

I would not pay your mortgage company one penny I did not need to.
You are allowed £499 overpayment each month YES
Thats nearly £6,000 a year
So overpay the max allowed and put rest in ISA,s 3.51% Natwest 3.61% Barclays and have money in bank if OH off work long term.
Dont waste £3000 GOOD LUCK

GAILEY

The thing is the longer I take to pay the more I pay...to them - the figures are quite a lot different.
And I am still getting less in an ISA than I'm paying in interest.

badboybill

Gailey,

Keep it simple, CASH is KING for the moment and maybe until 2011. Credit is really going to be hard to get hold off in the short term. Think how you are going to enjoy your lives until 2011. Birthdays, Christmas, Holidays, weekend treats, etc...

The terms for paying a lump sum are bad. You're thinking of spending 3k for lowering the term of your mortgage. Try looking for a product that’s going to give you more for your money even if it takes another six months. In that time pay the £499 at least you are doing something.

Businesses are getting desperate and you've got cash. Make them work for your custom.

GAILEY

The thing is I don't see how I could get a better deal elsewhere - I could be mortgage free in 3.5 years and have saved £14K in interest, even after paying the £3K penalty.

I understand what you are saying about how I am going to live in the short term - but we have no other debt, and both cars and caravan paid for. Also, I have a safety net as such by way of untaken dividend from the company, shares etc so I hope I have that angle covered.

Unless I am missing anything? The thing about just overpaying is that there is no penalty but that is because your only allowed to do a small amount and your not doing the BS out of much interest by doing that isn't it?

dimbo61

NO NO NO
When you took out your 10 year fixed rate deal at 4.99% you got a very good deal and that still applies today.
Most 5 year fixes today are at least 3.99% HSBC/ABBEY and thats 60% LTV plus £1000 fee.
So you overpay for the rest of the year 10x £499 = £5000
Put 2x£3600 in ISA,s this month earning 3.51% Natwest
Put 2x£3600 in ISA,s Barclays paying 3.61% after 5 april
Overpay by £499 a month for next 6 years and ask for mortgage payment to remain static and in 6 years time you could be mortgage free.
ISA,s are paying poor rates this year but who is to say that you wont get 5% next year.
You have a good mortgage deal just overpay the max allowed and save into ISA,s and you could be mortgage free at the end of your 10 year fix.
You will not save £14k in interest because you are not taking into account the interest you can earn from the money in savings.
6% regular saver at Barclays £250 a month x 2 ( you and OH ! )

GAILEY

mmmm......

I hear what you say....we are off for the weekend in our little caravan and I am going to have a good think.

The whole point of me posting my intention/dilema on this website was to benefit from other peoples thought's and suggestions..which is what I am doing (so thanks)....

dimbo61

If you overpay by £5000 this year and then £6000 a year for the next 6 years you will have cleared the mortgage before the end of the term £41,000 in overpayments alone.
So you may well have to pay a smaller mortgage payment each month for the last year !
Having savings in the bank is always a nice place to be.
Cash is King at the moment and going into a car showroom and telling them you have cash for that new tow car/ BMW Z4 means they will bite your hand off and start talking big discounts.
You dont know how long your OH will be out of work and having savings takes the pressure off.
What the mortgage interest rate will be in 2/3 years is anyones guess but you have a good deal at a good rate so stick with it and aim to be mortgage free in 6 years.

GAILEY

Thanks!
Back from our little weekend away and after much deliberation we are following your advice....so my posts will now switch over to the savings forum:D
Thanks again